Stocks Get Trump Boost to Close at All-Time Highs: Markets Wrap

(Bloomberg) — A late-day rebound in technology companies helped drive stocks to all-time highs, extending an advance fueled by President Donald Trump’s call for lower oil prices and interest rates.

About 330 shares in the S&P 500 rose, with the benchmark topping the 6,100 milestone. A closely watched gauge of chipmakers trimmed most of a slide that exceeded 2% earlier in the session. Meantime, a drop in crude — which tends to ease concerns about inflation — pushed the policy-sensitive two-year yield down. In late hours, Texas Instruments Inc. gave a disappointing earnings forecast. Boeing Co. reported revenue that missed analyst estimates.

Trump said he would ask Saudi Arabia and other OPEC nations to “bring down the cost of oil” and reiterated his threat to use tariffs to bring manufacturing back to the US as he addressed world leaders in Davos. He said he would demand an immediate drop in rates. Separately, Trump said he signed executive actions related to cryptocurrency and artificial intelligence.

Traders eagerly anticipating fresh insights into Trump’s trade policies got a more moderate tone regarding tariffs, which helped “soothe investor nerves,” according to Fawad Razaqzada at City Index and Forex.com.

“Trump, rightly or wrongly, wants to see a positive supply shock in the energy sector,” said Neil Dutta at Renaissance Macro Research. “That in turn will bring down inflation expectations, which in turn, will bring down rates.”

The S&P 500 added 0.5%. The Nasdaq 100 rose 0.2%. The Dow Jones Industrial Average climbed 0.9%. A Bloomberg gauge of the “Magnificent Seven” gained 0.2%. The Philadelphia Stock Exchange Semiconductor Index fell 0.4%. The Russell 2000 added 0.5%.

Bitcoin wiped out earlier gains. The Bloomberg Dollar Spot Index slid 0.2%. The yen climbed, with the Bank of Japan expected to raise its benchmark rate Friday by the most in 18 years. The yield on 10-year Treasuries advanced three basis points to 4.65%.

“If Trump can enact pro-growth measures while inflationary pressures abate, a rotation into cyclicals, smaller-cap names, and non-US assets is likely to materialize,” said Hal Reynolds at Los Angeles Capital Management. 

However, given the heightened levels of policy risk, the firm’s “Dynamic Alpha Stock Selection Model” continues to slightly prefer larger cap companies across the globe whose strong returns can be justified by their fundamentals.

To James Demmert at Main Street Research, the stock market is in a “calm before the storm mode” ahead of next week’s Federal Reserve decision press conference and the start of the big-tech earnings season — “both of which are likely to cause market volatility.”

Demmert sees any further consolidation or correction in stocks as an opportunity for investors. 

“We are still early in the AI and technology-led business cycle and bull market, which is now roughly two years old, and may last for another five years,” he noted.

The S&P 500’s recent leg higher missed an important ingredient: inflows from big-money managers. For those betting on a further rally, that’s a welcome development. 

A measure of aggregate positioning among rules-based and discretionary investors fell to a two-month low, according to Deutsche Bank AG’s data. And commodity trading advisors cut their long stock exposure to the level last seen in the aftermath of a market rout in August, data compiled by Goldman Sachs Group Inc.’s trading desk show. 

From a contrarian perspective, such skepticism bodes well for stock-market bulls because it means more dry powder to buy equities down the road, should the biggest fears fail to materialize.

“We continue to expect near-term volatility,” said Mark Haefele at UBS Global Wealth Management. “But we also believe US equities have room to grind higher as growth momentum continues.”

Corporate Highlights:

• American Airlines Group Inc. warned of a surprise loss to start the year as it tries to win back business travelers and battle high costs, disappointing investors following a string of bullish forecasts from other large carriers.
• Alaska Air Group Inc. beat Wall Street’s estimates to close out 2024 and forecast a better-than-expected start to the new year, giving the carrier a boost as it plans a significant overseas expansion.
• Electronic Arts Inc. warned its financial results would be weaker than expected due to poor sales results of two titles released over the holidays.
• General Electric Co. exceeded Wall Street expectations for profit and sales in the final months of the year as the jet engine maker worked through supply-chain limitations and capitalized on a strong maintenance backlog.
• Union Pacific Corp.’s quarterly earnings topped Wall Street estimates, and the railroad said it’s 2025 outlook remains the same despite a mixed economic forecast.
• Freeport-McMoRan Inc.’s sales projections missed analyst estimates, countering the impact of better-than-expected results last quarter.
• Elevance Health Inc.’s medical costs were lower than expected in the fourth quarter, relieving investor anxiety and helping the insurer meet profit expectations.
• ByteDance is exploring a deal to keep TikTok running in the US without selling its operations there, according to board member Bill Ford.

Key events this week:

• Bank of Japan policy meeting, Friday
• Eurozone HCOB Manufacturing & Services PMI, Friday
• US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.5% as of 4 p.m. New York time
• The Nasdaq 100 rose 0.2%
• The Dow Jones Industrial Average rose 0.9%
• The MSCI World Index rose 0.5%
• Bloomberg Magnificent 7 Total Return Index rose 0.2%
• Philadelphia Stock Exchange Semiconductor Index fell 0.4%
• The Russell 2000 Index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro was little changed at $1.0418
• The British pound rose 0.3% to $1.2354
• The Japanese yen rose 0.3% to 156.00 per dollar

Cryptocurrencies

• Bitcoin fell 1.1% to $102,897.7
• Ether fell 0.6% to $3,237.47

Bonds

• The yield on 10-year Treasuries advanced three basis points to 4.65%
• Germany’s 10-year yield advanced two basis points to 2.55%
• Britain’s 10-year yield was little changed at 4.64%

Commodities

• West Texas Intermediate crude fell 1.6% to $74.25 a barrel
• Spot gold fell 0.1% to $2,753.69 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Robert Brand, Julien Ponthus, Divya Patil, Catherine Bosley and Rob Verdonck.

©2025 Bloomberg L.P.